bwin.party struggles continue as profits fall 34%
German pressures and delays in technology development lead to a poor six months for bwin.party as it awaits its US and poker re-launch
Bwin.party has posted a 16% decline in H1 revenues and a 34% slump in EBITDA as the company felt the brunt of regulatory changes in Germany and delays in technology developments.
The operator’s revenues for the six-month period ending 30 June 2013 fell year-on-year to 342.5m from 410m. EBITDA was also down, falling by roughly a third to 60.7m from 92.3m.
The company said the losses were below expectations after its tactical shift from “volume to value” and despite introducing 70m of savings during 2013.
However, bwin.party also said its performance had been impacted by the introduction of a turnover tax in Germany, ISP blocking in Belgium and the closure of slots in Spain.
Revenues were down across the board with poker suffering the steepest fall with turnover down 35% to 62.3m. Sports betting proved the most resilient in comparison as it saw a 7% drop to 118.3m.
CEO of bwin.party Norbert Teufelberger (pictured) said: “The first half was always going to be a challenge as we set about optimising the shape and size of our business, with much greater focus on nationally regulated and to-be-regulated markets. As predicted, this meant that revenues declined but it also meant that we could make further reductions in our cost base.
“However, our performance and revenue is behind where we expected it to be at this point. This is partly due to external factors but also due to operational challenges associated with our dotcom migration in December 2012.”
The company predicts full-year revenue to fall by between 14% and 17% but stated the launch of new products, improved productivity and cost savings would see it return to growth in 2014.
The operator is due to re-launch its partypoker product first into the doctcom and nationally regulated markets before bringing in to New Jersey following its tie up with US land-based casino outfit MGM Resorts International and Boyd Gaming.
News of the negative results prompted a swift reaction from the stock exchange as the company’s share price tumbled by 10% to 114.30p.